Tuesday, August 25, 2009

a. Georgia Initiates Naval Blockade of Abkhazia

Saakashvilli Eats Tie

The President of Georgia, Tie-eating psychopath Mikheil Saakashvili, has decided to enforce a naval blockade on the breakaway province of Abkhazia -- on the Black Sea. A naval blockade is usually an act of war. But perhaps not here, with any luck. As some may remember, Georgian shelling of S Ossetian civilians and subsequent Russian counterattack was responsible for a brief 'hot' war which began on 8/8/8. The situation in Georgia could flare up once again.

Map of Georgia and Abkhazia

This may be important to your crude investment positions as the BTC pipeline runs through Georgia, and carries approx 1 mmbpd from the Caspian Sea through Azerbaijan and Georgia to both Supsa and Cehyan -- ports on the Black Sea and Mediteranian Sea, respectively. Two days prior the 2008 Russian-Georgian war, this pipeline was bombed and remained shut down for 19 days. The impact on the oil price in 2008 was muted due to the massive double-top and subsequent price collapse (Hubbert is rolling in his grave). We assume a similar non-effect would occur again, unless this were to escalate into a regional conflict.

Geogia BTC Pipeline

Georgia War Oil Prices 2008

No comments: